Italy is of great interest to us not only because it is one of the largest and fastest growing cellular markets but also because the GSM revolution started there around the same time as in India, in 1995. The GSM subscriber base almost tripled with the entry of a second operator, Omnitel. Now, it has reached about 2.6 million GSM subscribers (of over 6.4 million cellular subscribers), the population of Italy being 57 million. That means 12 percent penetration. There are two operators: Telecom Italia Mobile (TIM)-Europe's largest cellular operator, belonging to STET Group-and Omnitel (consortia including Olivetti, Airtouch, Bell Atlantic, Telia, and Mannesmann). TIM launched GSM service in April 1995 and Omnitel towards end 1995. The two, together, are now adding about 200,000 subscribers every month, on an average. A good benchmark!
As TIM did not have to pay any licence fee and Omnitel had to pay $470 million, the government had decided to compensate Omnitel through various means. First, Omnitel subscribers were allowed to roam TIM's network when they were outside the coverage of the former (for two years). Second, there is a discount on Telecom Italia's interconnection rates. Third, access will be given to DCS 1800 in 1998. Interestingly, the entry of Omnitel paved the way for an explosive growth for both the operators.
The unique roaming arrangement between the two operators is a model for the need to co-exist, co-operate, and continuously find ways of resolving issues, often through subscribers' education as they continue to roam between the two networks.
Italian operators have been extremely innovative with special packages addressing specific
market segments, like "Mr Night & Day", "Mr Business Time", "Family", and "Professional", based on behaviour and usage patterns of the subscribers, and placing emphasis on "perceived value of money".However, "customer care" and "quality of service" have been considered equally important. For example, Omnitel's customer service answers subscribers within three rings (on toll free number) and strives to complete the subscriber's query in one call itself.
TIM's start-up promotion, comprising of zero connection fee and zero monthly fee for first three months, had resulted in 38,445 subscribers (23,633 GSM) in one day. The focus is on airtime revenue (which at Lire 1.5 million per year per customer is fairly high). The monthly subscription by local standards is quite low and, interestingly, there seems to be hardly any subsidy on the handsets.
On 19 February, at the "GSM World Congress 1997" in Cannes, TIM received the GSM World Award for Marketing Success its pre-paid rechargeable "TIMCard" having attracted 840,000 subscribers since 6 October 1996. On 24 December 1995, 47,000 TIMCards were activated in a single day. TIM hopes to achieve over six million
prepaid subscribers in the next two years.Ramdin chacha might not have been to Italy but he looks forward to the day when he will be able to visit Italy and roam with his Csell Zee's SIM card: the Italian operators have not only a roaming arrangement between themselves but also with over 30 operators world-wide, including many in Asia. The Italian connection, the successful way!
Niraj K. Gupta,
from my cell, Voice & Data, March 1997. © Copyright Cyber Media India Ltd.